DECISION

Compaq Information Technologies Group, L.P. v Dealer Direct, Inc. d/b/a Inacom Information Systems

Claim Number: FA0104000097062

PARTIES

Complainant is Compaq Information Technologies Group, L.P., Houston, TX, USA (“Complainant”) represented by David M. Kelly, of Finnegan, Henderson, Farabow, Garrett & Dunner LLP.  Respondent is Dealer Direct, Inc. d/b/a Inacom Information Systems, Lincoln, NE, USA (“Respondent”).

REGISTRAR AND DISPUTED DOMAIN NAMES

The domain names at issue are <compaqdirect.com>, <compaqonline.com>, and <compaqdirectplus.com>, registered with Network Solutions, Inc. (“NSI”).

PANEL

The undersigned certifies that he has acted independently and impartially and to the best of his knowledge, has no known conflict in serving as Panelist in this proceeding.

Panelist is Judge Karl V. Fink (Retired).

PROCEDURAL HISTORY

Complainant submitted a Complaint to the National Arbitration Forum (“the Forum”) electronically on April 13, 2001; the Forum received a hard copy of the Complaint on April 16, 2001.

On April 17, 2001, Network Solutions, Inc. confirmed by e-mail to the Forum that the domain names <compaqdirect.com>, <compaqonline.com>, and <compaqdirectplus.com> are registered with Network Solutions, Inc. and that the Respondent is the current registrant of the names.  Network Solutions, Inc. has verified that Respondent is bound by the Network Solutions, Inc. 5.0 registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).

On April 17, 2001, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of May 7, 2001 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts, and to postmaster@compaqdirect.com, postmaster@compaqonline.com, postmaster@compaqdirectplus.com by e-mail.

A timely response was received on May 24, 2001. Thereafter Complainant made a timely additional submission. All submissions by the parties have been considered by the Panel.

On June 1, 2001, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Judge Karl V. Fink (Retired) as Panelist.

RELIEF SOUGHT

Complainant requests that the domain names be transferred from Respondent to Complainant.

PARTIES’ CONTENTIONS

A. Complainant

Complainant is a Texas limited partnership that owns and licenses intellectual property to Compaq Computer Corporation (“Compaq”) and Compaq’s related companies.

Complainant is the owner of the federally registered trademark and service mark COMPAQ, as well as the trade name COMPAQ and the domain name COMPAQ.COM. “Compaq” is a fanciful term as applied to Complainant’s services and products, and the COMPAQ mark enjoys unquestionable fame as a result of favorable public acceptance and recognition worldwide.

Complainant is also the owner of the federally registered mark DIRECTPLUS. “Directplus” is an arbitrary term as applied to Complainant’s services and products.

Respondent is Dealer Direct, Inc., d/b/a Inacom Information Systems. Dealer Direct, Inc. is the registrant of the domain names <compaqdirect.com>, <compaqonline.com>.  Inacom Information Systems is the registrant of the domain name <compaqdirectplus.com>.

Dealer Direct, Inc. and Inacom Information Systems share the same address. Paul Zoz is listed as the Administrative and Billing Contact for all of the Domain Names.

Dealer Direct, Inc. is a Nebraska Corporation, and its registered agent, Edmund F. Bruening, shares the address listed for Inacom Information Systems in the WHOIS records.

The Rules provide that a Complaint may relate to multiple domain names as long as those names are registered by the same domain-name holder, and it is appropriate to proceed in a single Complaint against multiple domain names when it is established through similarity of contact information that one entity registered the domain names using different names.

The disputed domain names <compaqdirect.com>, <compaqonline.com>, and <compaqdirectplus.com> each fully incorporate Complaint’s valuable and famous federally registered trademark COMPAQ within the domain name and are each confusingly similar to Complainant’s COMPAQ mark and trade name.

The disputed domain name  <compaqdirectplus.com> also fully incorporates Complainant’s federally registered mark DIRECTPLUS within the domain name and is confusingly similar to Complainant’s DIRECTPLUS mark.

Respondent does not have rights or a legitimate interest in the domain names because Respondent’s Registration and use of the domain names, which incorporate Complainant’s famous COMPAQ mark and Complainant’s DIRECTPLUS mark, are unauthorized.

As a coined trademark, the COMPAQ mark is inherently strong.

Complainant has continuously used COMPAQ as a trade name, trademark and service mark from 1982 to the present. Complainant owns registrations for the COMPAQ mark in over 100 countries around the world.

Complainant also owns the domain name COMPAQ.COM, which it registered on April 20, 1995 and which it has used to operate a website promoting its COMPAQ-branded products and services since on or about that date.

Respondent misappropriated Complainant’s goodwill when it registered the domain names. 

The domain name <compaqdirect.com> is comprised of the mark COMPAQ and the descriptive word “direct”. The most logical inference from this combination of terms is that Complainant operated a website at that domain name where consumers can purchase COMPAQ products “directly” from Complainant.

Consumers would most logically infer from the domain name <compaqonline.com> that Complainant operates a website at that domain name where consumers can purchase COMPAQ products “online” from Complainant.

The third domain name, <compaqdirectplus.com>, incorporates both the famous COMPAQ mark and Complainant’s federally registered DIRECTPLUS mark, which doubles consumers’ expectation of finding Complainant’s website at that domain name.

Respondent’s registration and use of the domain names is likely to cause confusion and to deceive consumers into mistakenly believing that Respondent’s websites and associated products and services are offered, authorized, or sponsored by Complainant; or are otherwise connected, associated, or affiliated with Complainant.

Respondent’s websites display a large link to the web site of Direct Sales, Inc.  Direct Sales, Inc. is a d/b/a of Bizco, Inc., an authorized COMPAQ reseller.  Respondent itself is not an authorized COMPAQ reseller.

In addition to registering the three domain names that are confusingly similar to Complainant’s marks, Respondent has also registered many other domain names that incorporate famous and/or well-known marks of third parties, each of which is a company that offers computers or other technology-related products and/or services.

Respondent uses the domain names to intentionally attract, for commercial gain, Internet users to its websites by creating a likelihood of confusion with Complainant’s famous COMPAQ mark and federally registered DIRECTPLUS mark as to the source, sponsorship, affiliation and endorsement of Respondent’s websites and of the services offered at those sites.

Respondent registered the domain names in order to prevent Complaint from reflecting its COMPAQ and DIRECTPLUS marks in domain names, and has engaged in a pattern of such conduct by registering domain names that are comprised of the marks of others.

Given the uniqueness and fame of the COMPAQ mark, there is no plausible explanation for Respondent’s registration of the disputed domain names other than to trade on the goodwill of Complainant and its famous and well-respected COMPAQ mark and name.

By registering the domain names with actual knowledge of Complainant’s COMPAQ mark and name, Respondent acted in bad faith by breaching its registration contract with NSI because it falsely represented that its registration of the domain names did not infringe the rights of any third party.

Even assuming Respondent can permissibly sell COMPAQ products, it has no right to register or use COMPAQ-formative domain names. 

B. Respondent

Dealer Direct, Inc. is a Nebraska Corporation that owns and licenses intellectual property to Bizco, Inc. and Direct Sales, Inc.  The principals of Dealer Direct, Inc. are principals in Bizco, Inc. and Direct Sales, Inc. and are related companies operating at 7950 O Street, Lincoln, Nebraska 68501.

Trademarks for COMPAQDIRECT, COMPAQONLINE, and COMPAQDIRECTPLUS are not registered trademarks of Complainant.

In 1999, Dealer Direct was contacted by Compaq Computer Corporation and asked to make modifications to the web pages then in place to insure that there was no customer confusion, and that customers had the opportunity to go directly to the COMPAQ.COM website, or choose to access the Dealer Direct website.

Dealer Direct, with the direction of Compaq, made these changes, which has resulted in what is now Respondent’s current primary page for these domains.

During the operation of these websites, Dealer Direct has not received one single complaint as to misrepresentation, or confusion when accessing these websites. The Complainant references five e-mails. With the large number of Dealer Direct customers accessing these web sites on a daily basis, five complaints, although undesirable, would constitute an incredibly small number of users that visit these websites.

Bizco, Inc. (d/b/a Inacom Information Systems) is an authorized Compaq reseller. As a Compaq reseller, Bizco is entitled to utilize the trademark “Compaq” in conjunction with the marketing and sales of Compaq products on behalf of Compaq Computer Corporation.

The subject domain names have been in use by Dealer Direct since their registration dates, beginning in June 1996. Dealer Direct has used these domain names as part of its marketing strategy, even before the Internet was considered a viable means of selling technology products. Dealer Direct is authorized to use the Compaq trademark as part of the Compaq Authorized Reseller Agreement entered into with Compaq. Respondent is an Authorized Service Provider, System Service provider, and an Authorized Services Reseller.

These domains, as well as other domains that Respondent owns are utilized to market technology products which the Respondent is authorized to sell and market.

At the time of registration (1996), Authorized Compaq Resellers were not prevented from using the Compaq trademarks separately or as part of any composite word. Inacom Information Systems met with Compaq representatives several times to discuss how Inacom could best utilize the subject domains to drive more Compaq business. Inacom Information Systems received assurances that our use of subject domains was a positive step in increasing our Compaq sales.

Dealer Direct acted in good faith, had the approval to utilize these domains, and was encouraged to promote the domains so that Compaq Computer Corporation would benefit through the increased sales of their products by an authorized reseller.

 

Complainant is attempting to reverse their earlier approval of the use of these domains to take advantage of the efforts and success of the Respondent to accommodate a marketing strategy that did not exist until recently. Complainant is engaging in domain hijacking to acquire a now desirable domain name.

C. Additional Submissions

Complainant

As identified in the Complaint, Respondent is Dealer Direct, Inc. d/b/a Inacom Information Systems.

Bizco is an authorized Compaq reseller, as was shown by Complainant’s provision of a copy of Bizco’s executed agreement not to register and use domain names comprised of Compaq marks.

Dealer Direct is not and has never been an authorized Compaq reseller, and is not and has never been authorized by Complainant to use the Compaq trademark in any way. The Compaq Authorized Reseller Agreement has never and currently does not authorize resellers to register and/or use COMPAQ-formative domain names.

Respondent states that the principals of a Compaq authorized reseller, Bizco, formed another corporation, Dealer Direct, and are now using that corporation to claim intellectual property rights in the COMPAQ mark by “licensing” the domain names <compaqdirect.com>, <compaqonline.com> and <compaqdirectplus.com> back to Bizco. Respondent’s claim to be a licenser of the COMPAQ mark as part of the domain names is patently false. And in no way demonstrates respondent’s legitimate interest in the domain names.

Complainant has never authorized Respondent to use any of the domain names. Complainant has objected to the domain names on various occasions from the time that Complainant learned of the domain names. 

Complainant attached a Declaration of J.P. Stevens refuting Respondent’s claims. Mr. Stevens attests that he repeatedly told Respondent throughout a 1997 meeting that he was not authorizing, and moreover had no authority to authorize, Respondent’s use of the domain names.

Respondent submitted John Bryant’s September 1, 1998 e-mail to Paul Zoz as evidence of Complainant’s alleged approval, when in fact, that e-mail clearly asked Respondent to stop using the domain names until Complainant authorized their use.

The only documented “contact” between Respondent and Complainant in 1999 is Complainant’s March 8, 1999 cease-and-desist letter.

From October 2000 until the filing of the Complaint in April 2001, Complainant asked respondent on many occasions to provide the authorization it claimed to have received for the domain names.

Respondent did not provide copies of any relevant correspondence or any other documentary evidence that Complainant approved Respondent’s registration and use of the domain names, with the Response or at any other time. 

A licensee or reseller of trademarked products does not have the right to use the trademark as a domain name.

Complainant has proved that Respondent acted in bad faith pursuant to Section 4(b)(iv) of the UDRP. Complainant provided evidence of confusion, when it needed only to show a likelihood of confusion. Complainant has proven that Respondent uses the domain names to intentionally attract, for commercial gain, Internet users to its websites by creating a likelihood of confusion with Complainant’s famous COMPAQ mark and federally registered DIRECTPLUS mark as to the source, sponsorship, affiliation, and endorsement of Respondent’s websites and of the services offered at those sites.

Complainant has also established that Respondent’s pattern of registering domain names containing others’ well-known trademark constituted bad faith pursuant to Section 4(b)(ii) of the UDRP.

FINDINGS

For the reasons set forth below, the Panel finds the Complainant has proven the elements to have the domain names transferred.

DISCUSSION

Paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) instructs this Panel to “decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

(1) the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

(2) the Respondent has no rights or legitimate interests in respect of the domain name; and

(3) the domain name has been registered and is being used in bad faith.

Identical and/or Confusingly Similar

Respondent’s <compaqdirect.com>, <compaqonline.com>, and <compaqdirectplus.com> domain names are confusingly similar to Complainant’s famous mark because the domain names are primarily comprised of Complainant’s mark with a generic or descriptive term.  See General Electric Co. v. Forddirect.com, Inc., D2000-0394 (WIPO June 22, 2000) (finding that adding the generic term “direct” to the Complainant’s marks (GE CAPITAL and GECAL) does not alter the underlying mark held by the Complainant, and thus the Respondent’s domain names are confusingly similar); see also Broadcom Corp. v. Domain Depot, FA 96854 (Nat. Arb. Forum Apr. 23, 2001) (finding <broadcomonline.com> to be confusingly similar to Complainant’s mark, Broadcom).

 

In addition, Respondent’s domain names are so confusingly similar a reasonable Internet user would assume that the domain names are somehow affiliated with Complainant.  See Treeforms, Inc. v. Cayne Indus. Sales Corp., FA 95856 (Nat. Arb. Forum Dec. 18, 2000) (finding that confusion would result when Internet users, intending to access Complainant’s web site, think that an affiliation of some sort exists between the Complainant and the Respondent, when in fact, no such relationship would exist).

            Complainant has proven this element.

Rights or Legitimate Interests

Respondent has no rights or legitimate interests in the domain names because it is not commonly known by Complainant’s marks and Respondent has not used the domain names in connection with a bona fide offering of goods and services or for a legitimate noncommercial or fair use.  See Broadcom Corp. v. Intellifone Corp., FA 96356 (Nat. Arb. Forum Feb. 5, 2001) (finding no rights or legitimate interests because Respondent is not commonly known by the disputed domain name or using the domain name in connection with a legitimate or fair use).

Respondent is not an authorized COMPAQ reseller and has no rights or legitimate interest in the names.  See Hewlett-Packard Co. v. Burgar, FA 93564 (Nat. Arb. Forum Apr. 10, 2000) (finding that Respondent has no rights or legitimate interests in the <hewlettpackard.com> domain name, because Respondent is not a licensed dealer of Hewlett-Packard products and has not demonstrated any right except to declare that he is affiliated with a licensed re-seller of Complainant’s products).

            Complainant has proven this element.

Registration and Use in Bad Faith

Complainant alleges bad faith under Policy ¶ 4(b)(iv), because Respondent uses the domain names to intentionally attract, for commercial gain, Internet users to its website by creating a likelihood of confusion with Complainant’s mark.

Respondent by claiming to be an authorized Compaq reseller admits notice of Complainant’s COMPAQ mark prior to the registration of the domain name,  See Household Int’l, Inc. v. Cyntom Enter., FA 95784 (Nat. Arb. Forum Nov. 7, 2000) (“Just as the employment of a well-known business name for no particularly good reason undermines any claim to legitimate interest, so it may also support an inference of a bad-faith attempt to use the name to harass or exploit its legitimate owner…”)

Respondent’s registration and use of the disputed domain names is likely to cause confusion and to deceive consumers into mistakenly believing that Respondent’s web sites and associated products and services are offered, authorized, or sponsored by Complainant or are otherwise connected, associated, or affiliated with Complainant.  See Identigene, Inc. v. Genetest Lab., D2000-1100 (WIPO Nov. 30, 2000) (finding bad faith where Respondent's use of the domain name at issue is likely to confuse the user into believing that Complainant is the source of or is sponsoring the services offered at the site).

The Panel finds bad faith, even though Respondent has employed a disclaimer.  See Thomas & Betts Int’l v. Power Cabling Corp., Inc., AF-0274 (eResolution Oct. 23, 2000) (finding bad faith based upon initial interest confusion despite disclaimer and link to Complainant’s website on Respondent’s website).

            Complainant has proven this element.

DECISION

The panel directs that the domain names  <compaqdirect.com>, <compaqonline.com>, and <compaqdirectplus.com>, be transferred to the Complainant.

Honorable Karl V. Fink, Panelist

June 14, 2001